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Going Independent? 7 Business Partners You Need

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For advisors looking to break out of wirehouses, legacy firms or banks, going independent doesn’t necessarily mean they'll be going it alone.

In fact, there are a number of essential components of a practice that are vital to an independent start-up. An experienced transition team, a solid custodian and legal and compliance counsel are just a few of the critical partners you will need to rely on.

Here is a detailed list of the most important business partners and their respective roles:


The financial regulatory environment is crucial to understand. Having experienced legal and compliance support early and ongoing will mean that required paperwork, registrations and licensing matters are handled efficiently and accurately. The goal is to get up and running sooner, and avoid nasty surprises later on.

Choosing legal and compliance counsel who has worked with the transitioning of financial advisors and the establishment of wholly independent RIAs will go a long way towards protecting your life’s work and livelihood, making the process more efficient. A legal team versed in the Broker Protocol will ensure a transitioning advisor knows the legal and practical rights regarding existing clients and the ability to move them to your new firm.

On the compliance front, major financial firms have armies of compliance personnel dealing with the constantly shifting and heightening regulatory environment. Wirehouse advisors, for the most part, do not have to manage those issues, or may not even be aware of the more arcane ones. In the independent space, it’s recommended that advisors work with compliance providers who can advise and handle the requirements around state licensing and registration, Form ADV, securities licenses, compliance policies, advisory agreements and other necessities related to the specific business structure and scope of services involved.

For hybrid advisors, the broker-dealer you select will also play a major role in helping with compliance-related matters.


Clients understandably want to know their assets are safe and are even taking an interest in which custodians their advisor works with. Choosing the right custodian is a vital step, so take the time to explore the marketplace – research online, ask industry peers and contact firms directly. Do the due diligence, ask a lot of questions.

What will make the selection easier is knowing the custodian’s capabilities to transition, grow and support an independent business. Look for firms that understand the goals and culture of your business, and offer the services, tools and guidance that complement them. They should be set up to deal with not only the operational aspects of transferring client accounts, but also make holding and reporting on client assets simple and safe. Other issues to address are pricing, access to lending for clients, mapping of managers that you use, flexibility on alternative investments, and technology support – to name a few.


Many advisors going independent choose a hybrid model RIA, meaning they have a broker-dealer that helps with legacy commissionable business, while conducting their advisory business under their wholly independent RIA. There are many independent broker-dealers (“IBDs”) in the market now that are available to advisors. It is important to map your current commissionable business, products, and services to your new broker-dealer in advance to ensure that you will be able to not only continue business with the new broker-dealer, but ideally do so with better economics for you and your clients.

Be sure to understand the transition process, paperwork, technology, service, and staffing support you will have for you and your team. Your IBD should be helpful on compliance structure, as well, so make sure you understand compliance programs, their role, and yours in process. Economics vary, too, so be sure to understand compensation schedules. Some IBD's charge an override on advisory assets while others do not, so be sure to completely understand the economic package. On average, we find that most, if not all, commissionable business that advisors seek to conduct in independent space is feasible with the right IBD partner.


RIA custodians provide many of the basic products advisors need to run their firms. This varies from firm to firm, so it's important to map your book to the prospective custodian. For private wealth advisors who deliver broader wealth management services to higher net worth clients, you will often need to find service providers in areas like insurance services, trust services, private bank lending, capital markets, separate managed account access, institutional quality research, and alternative investments to name a few.


The kid-in-the-candy-store advantages of an open-architecture platform, as compared to the more limited options offered in legacy firms, is one of the premier benefits of the independent space. In theory, there are no limits as to the combination of proprietary and non-proprietary strategies, traditional and non-traditional investment options, service providers and other resources that can be drawn upon. In fact, you will likely have to put disciplines in place around how much time you spend looking at all that is available.

Whichever platform a transitioning team chooses, it should be as deep and wide in resources as it is in expertise, with access to the leading solutions and professionals from across the financial universe. Many advisors look for one that combines research, total access to the universe of independent portfolio managers, performance reporting, CRM systems, straight-through processing of trades, unified billing and reporting and a client portal.


Many wirehouse advisors say they want more customization than what is provided with the legacy systems at their current firm. As an independent, the freedom to work with leading providers will ensure teams have cutting edge, integrated and evolving systems that often outpace anything available in wirehouses.

Technology is not a replacement for person-to-person financial management, but the right mix of technology and support will optimize the time advisors spend with clients—a fact that has the single biggest impact on advisor satisfaction. Best practices include technology and software solutions that are aligned and integrated with workflow processes, and address and resolve compliance issues quickly and efficiently. Client-facing and back-end systems need to work together seamlessly across all CRM, transactional and reporting requirements.


Finally, an independent RIA is not just a business, but a brand. Independent advisors leaving a wirehouse or bank no longer have the positive or negative associations with their legacy banks.

It is important to have a strong identity and solid presence from day one. Without a major firm to provide recognition and visibility, independent advisors have to think more about professional, effective and impactful marketing. Some advisors have an inherent sense of marketing, branding and communications and come into the transition process with definite ideas or even steps in place – name, tagline, logo, imagery, brand “voice” – and only require print and digital materials and a communications plan. A vital component is getting the word out during launch and post-launch strategic planning, media relations, interviews. Many have not had to deal first-hand with this end of the business, and require or desire as much professional input as possible.

An effective public relations effort will coordinate media contacts, set up interviews with national and local reporters and disseminate your press release. This is a cost-effective way of getting immediate publicity, and an opportunity to establish yourself or your firm as “subject matter experts” available to answer future media requests – and generate positive visibility for your firm.

Advisors in the process of going independent have a lot on their plates – registrations, financing, etc. The nitty-gritty of getting a website up and running or ensuring that a carefully crafted media message is in place and ready to go can often turn into, at best, ineffective efforts, and at worst, last-minute fire drills.

Shirl Penney is the founder of Dynasty Financial Partners, a firm which provides infrastructure and support services for independent investment advisor teams.

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